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Leviathan carbon taxes in the short run

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  • Richard Tol

Abstract

A cap is imposed on the carbon tax rate if the total tax revenue is not allowed to increase. Using recent data on the carbon-intensity of the economy and the overall tax take, I show that this cap constrains almost any climate policy in at least some countries. A larger number of countries, emitting a substantial share of global carbon dioxide, cannot fully participate if the carbon tax (or equivalent alternative regulation) is high enough to meet the 2 °C target. For that target, the carbon tax revenue in 2020 is greater than 10 % of total tax revenue in every country. Copyright Springer Science+Business Media B.V. 2012

Suggested Citation

  • Richard Tol, 2012. "Leviathan carbon taxes in the short run," Climatic Change, Springer, vol. 114(2), pages 409-415, September.
    • Handle: RePEc:spr:climat:v:114:y:2012:i:2:p:409-415
    DOI: 10.1007/s10584-012-0544-z
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    1. David Anthoff & Richard S. J. Tol, 2022. "Testing the Dismal Theorem," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 9(5), pages 885-920.
    2. Richard S. J. Tol, 2025. "Conceptual winsorizing: An application to the social cost of carbon," Papers 2508.07384, arXiv.org, revised Aug 2025.
    3. Carraro, Carlo & Favero, Alice & Massetti, Emanuele, 2012. "“Investments and public finance in a green, low carbon, economy”," Energy Economics, Elsevier, vol. 34(S1), pages 15-28.
    4. Richard S J Tol, 2018. "The Economic Impacts of Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 4-25.
    5. Richard S. J. Tol, 2014. "Ambiguity Reduction by Objective Model Selection, with an Application to the Costs of the EU 2030 Climate Targets," Energies, MDPI, vol. 7(11), pages 1-11, October.
    6. Richard S.J. Tol, 2021. "Estimates of the social cost of carbon have not changed over time," Working Paper Series 0821, Department of Economics, University of Sussex Business School.
    7. Richard S.J. Tol, 2025. "Climate Determinism Reborn," Working Paper Series 0725, Department of Economics, University of Sussex Business School.
    8. Richard S. J. Tol, 2021. "Estimates of the social cost of carbon have increased over time," Papers 2105.03656, arXiv.org, revised Aug 2022.
    9. Tol, Richard S.J., 2023. "The fiscal implications of stringent climate policy," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 495-504.

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